It'll take a while to see if Nick Buckles weathers the storm

There’s a regular sweepstake held at G4S. Ahead of the release of major
market-moving news, the security company’s executives have a little bet on
how the group’s share price is going to react. I wonder if they still play
when the chief executive’s job is on the line.

Buckles’ argument that he didn’t know about the problems until too late will only harm his case.

Nick Buckles will have been watching the 8.6pc fall in G4S’s shares today with some alarm. Having publicly wagered his future as chief executive on how the stock reacted, seeing £340m wiped off the company’s valuation won’t have done anything to calm the nerves.

Whether he regards the share price fall as making his position untenable remains unclear – but Buckles is canny enough to know that’s not the point anyway. When G4S tried to buy Danish rival ISS in a blockbuster £5.2bn deal last year, only to see the bid collapse in a flood of recriminations, the shares fell 20pc. Buckles survived that storm – investors baulked at such a large deal but the failure was one of over-ambition rather than incomptence. The Olympics fiasco feels a whole lot more damaging.

Shareholders don’t expect Buckles to be across every contract – G4S is the FTSE’s biggest employer with operations in 120-odd countries – but not being across the Olympics brief looks like a terrible oversight. At a time when politicians like nothing better than to take a stick to business, to distract from their own failings, companies operating in the public eye have to be on top of their game. The Olympics only magnifies that point.

Buckles’ argument that he didn’t know about the problems until too late will only harm his case. It just looks like he’s taken his eye off the ball and, if there is one thing shareholders will be uncomfortable with, it’s the idea that the chief executive is not across his patch.

The security boss appears before MPs tomorrow to explain himself but I don’t expect the Select Committee session to be very instructive. Not just because the politicians will play their usual game of “soundbites for headlines” but because this mess isn’t one which needs a lot of dissecting. It’s not about working out how Libor was rigged or what is going wrong with our railways – it’s a pretty simple case of poor organisation and ineffective leadership.

Buckles’ response to the mess has actually been pretty text book. He’s got in front of the cameras and apologised, thanked soldiers for their time, refused to pass the buck, given up his bonus and put his own position at the mercy of shareholders. But really he had little choice – he’ll play the contrite chief executive because there’s no one else to blame.

Whatever Wednesday’s headlines, the real question for shareholders is whether G4S’s failures run deeper. With Buckles in charge there will always be a nagging suspicion that, having missed this fiasco, he’ll miss others too. The £50m hit to the bottom line can be dealt with; reputational damage and the loss of future government contracts are altogether more difficult to stomach.

Shareholders will hold off for now. There’s no sense in aggravating problems by leaving the company rudderless and, anyway, the situation could still get worse before it gets better. G4S’s role in the Olympics will be under an unforgiving spotlight over the next few weeks, there might yet be further reputational damage.

But as the fireworks light up the closing ceremony, G4S’s temps might not be the only ones looking for new employment.

Wider truth about Libor is emerging

The Chinese Whispers argument just won’t wash any more. The incontrovertible conclusion from today’s Libor hearing was that the Treasury Select Committee hasn’t heard the whole truth and nothing but the truth.

Bob Diamond told MPs that his former right-hand man Jerry del Missier had misunderstood instructions when ordering Libor to be low-balled. Del Missier said today that Diamond’s instructions had been very clear and that the Barclays chief had said the order came directly from Paul Tucker, the Bank of England’s deputy governor. Tucker himself denies even raising the subject.

For now, all remains suspicion and conjecture but del Missier did highlight a wider truth that seems to be emerging. Asked about Libor low-balling, the former Barclays banker said: “In the grand scheme of everything that was going on, it didn’t seem like a significant event.”

It appears increasingly likely that was a view adopted all across the City – banks, regulators and all.